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Image Sitemap - Image location OR Link to image PAGE location

When building an Image Sitemap.xml: should the image location <image:loc>be to the actual image OR the page that has image displayed?

Reasoning: if the SE creates a link to the image, the viewer will link to a page with just the JPG displayed, not the webpage with all the html other content.

Or do the Search Engines know this and find the link to the webpage where the image is displayed to created a search engine result?

The reason for the question is that I ran a trial on a image-sitemap creator & it listed all the actual image locations - not the page that contain the images.
I would think - they know what they are doing, but want to understand the process.
When website crawlers/spiders look for Images - do they look for file format (.png, .jpg etc.) in any website folder OR do they look for <img src="# ...>" on the html webpage??